The organization has launched a full-court-press education program to convince legislators and candidates that a bill to raise property taxes on solar panel installations 6,000 percent will kill one of the state’s only growing industries in a down economy.
Legislators introduced a bill in the last session that industry leaders feel will make it to the floor in the upcoming session. The bill would increase the property tax on solar installations from 0.5 percent to 33 percent.
Andy Johnson, executive director of TenneSEIA, said he believes the legislation came out of the Comptroller’s office as a result of political differences between that office and the former governor, who institutes several solar incentives, including the low property tax rate.
“That is a high tax,” Johnson said.
And it would damage the industry. In fact, he said it already has.
“It’s already scared away a lot of investment from the state,” Johnson said. “Businesses don’t like that kind of uncertainty.”
He said companies that offer solar leasing to homeowners have elected to wait on entering the Tennessee market until the tax issue is resolved because it could be crippling to that industry.
A University of Tennessee study showed that the high property tax rate would slow down industry growth dramatically.
Rebates and incentives, like the low property tax, have also developed a strong downstream market for solar installers.
There were five megawatts of installed solar in Tennessee in 2010, another 20 in 2011 and there were 15 megawatts installed in the first quarter of 2012, Johnson said.
“That will slow down a bit,” he said.
The slow-down is expected because of the property tax threat as well as reductions and reevaluations of other incentives and rebates.
“But we’re still on track to install 30 megawatts by the end of this year,” he said. “We’re still growing.”